Q&A: Microsoft executive has his head in the cloud

Microsoft made several announcements during last week’s Worldwide Partner Conference in D.C. about its plans for Web-based or “cloud” computing. One centered on a new service that allowing organizations to create private clouds, walled off from the public Internet. The company also showed off mobile and tablet devices that use the cloud to sync with the computer desktop and the Xbox game system.

Tim O’Brien, the man charged with crafting Microsoft’s goals for cloud computing, sat down with Capital Business. Here are edited excerpts of that conversation.

Why has Microsoft decided to move to the cloud?

At the topmost level, there’s an inevitability to this. The people who move first can quite often be the biggest beneficiaries.

When Microsoft thinks of the companies that use its software, what do you see as their first move into the cloud?

For most companies, their first move into the cloud is with so-called “commodity workloads” — the workloads you need to run your business, but that aren’t necessarily a source of competitive differentiation or business edge. E-mail and collaboration are fairly obvious ones. We also see movement with apps that have poor economics on-premises, either because their usage patterns result in low server utilization, or the server infrastructure has been purposefully over-provisioned to allow headroom for unpredictable load increases.

How does this change Microsoft’s overall business model?

We’re no longer just charging money for a software license. We’re charging money for a software license deployed on a server that we’re paying for, in a building that we’re paying the lease on, being cooled off by a fan that we paid for. If customers had to [provide all] that on their own, they might pay more. So they’re getting cost advantages by doing it with us, [and] we get more revenue.